Philippine Airlines (PAL) has averted the threat of repossession of its fleet with a $37.9 million payment to its fully secured aircraft creditors.
It is the first payment since June 1998 towards clearing the airline's $2.24 billion of debt. According to PAL, the payment was approved on 29 January by the Philippine Securities and Exchange Commission (SEC).
Airline executive vice-president and chief operating officer Jaime Bautista claims that PAL was able to source the payment "-mostly from operational revenues. This will clear the way for a new rehabilitation plan for submission to the SEC by about 15 March".
A formal arrangement with creditors is under discussion, whereby no aircraft would be confiscated before 15 March, in exchange for the $37.9 million payment.
Malaysia Airlines (MAS) began codesharing with PAL on 1 February, with PAL getting a seat allocation on MAS' 11 weekly services to Manila and Cebu in the Philippines from the Malaysian cities of Kuala Lumpur, Kota Kinabalu and Kuching. PAL's Malaysian services ended in June.
Source: Flight International
